Microsoft Confirms Zune HD: Adds Web Browser But Still Behind iPod touch?

Yesterday I noted the rumor that Microsoft will offer a Zune 30GB trade-in upgrade in June. Now, we learn that Microsoft will launch the oft-rumored Zune HD sometime this fall and its is designed to compete with Apple’s iPod touch (CNET)…

Microsoft confirms Zune HD coming this fall

The Zune HD will feature:

– an HD radio tuner
– OLED touch screen
– Internet Explorer web browser customized for the touch screen

The Zune has one other interesting feature missing from the iPod family of features: Zune Pass. Zune Pass costs $14.99 a month and provides unlimited access to the songs in the Zune Marketplace. It also lets you permanently keep 10 songs per month. Since Apple’s iTunes now prices many songs at $1.29, if you keep 10 songs every month, the service essentially costs just $2.09 per month. That seems like a pretty good deal. FYI: Apple iTunes provides at least two and often three free songs per week. However, Apple chooses these featured free songs.

Of course, the rumor is that Apple will introduce a 3rd generation iPod touch soon that includes a camera. The iPod touch doesn’t have a FM or HD radio, but it does have a great Safari mobile web browser?

Given this knowledge, does it make sense to to pay $110 to upgrade from a Zune 30GB to a Zune 16GB flash model or $160 for a Zune 80GB hard drive model?